Okay experienced RE pros, I have an interesting question for you. I'm an "aspiring" agent I guess you could say, although my current profession is Internet Marketing/Consulting. I do A LOT of interactive custom listing websites w/ virtual tours, online video etc for FSBO's and select agents in my area. I'm not an agent yet but I know a helluva lot about marketing real estate.

So here's my scenario... Let's say I am a newly licensed Real Estate Agent with a hot $900k former FSBO ready to list, but I do NOT have an agreement in place with ANY Brokers. I do, however, have an experienced Realtor that has agreed to work with me on a listing. For simplicity, let's assume that this other agent is with Re/Max - who, as I understand it, typically pays for all their own expenses but keeps 100% of their commissions. This experienced Realtor has agreed to handle all of the things that I do not have experience with (nor do I want to do), and I will handle all of the marketing aspects of the property. We agree to split the commission 50/50. The INDEPENDENT CONTRACTOR AGREEMENT can be drawn up between myself and the Broker FOR THAT PARTICULAR PROPERTY ONLY so long as the broker agrees to it, right? And I'm quite confident that $$ written into the deal would help the Broker more readily agree to it, otherwise I take the listing somewhere else.

I understand that the "traditional" Broker-Realtor relationship has been that the Realtor is an INDEPENDENT CONTRACTOR for the Broker, typically over a longer period of time (1-3 years). ALL deals brought forth by the Agent is done as an INDEPENDENT CONTRACTOR doing business under that Broker. I know that by law, the agent can only be paid by the Broker of record, and the Broker of record is the only one that can be paid by the seller. I am looking to get a much bigger piece of the action (since I got the listing) but only on a property by property basis. I am not interested in a long term deal with just ONE Broker.

The listing would be under the experienced Agent's name, not mine. I would be a "free agent" entitled to 50% of the deal upon sale.

Although it bucks what the "traditional" Broker-Agent relationship has historically been, I don't see a problem with it LEGALLY so long as the Broker agrees to it.

I hope this makes sense, and would appreciate any feedback...
-RB

You will have to check with an attorney in your area to see if you COULD set this up and even if it's LEGAL or not.

Referrals are generally allowed only from agent to agent.Since you are not an agent you would not fall under that category.In my state we ar enot allowed to give non-agents/brokers refferal fees.

I can't say for each person you bring me I will give you 500 dollars,it's not allowed.

50 percent is really steep and you doing the marketing side of things wouldn't sit well from a broker's liability standpoint.

Housevalues and others still get fees so you would need to check how they do it.I am sure there is probably a way to get around anything if you have enough money and attorneys to draw up the legal paperwork.

no legal advice

Uuuuuuhhhhhhhhhh . . NO.

In EVERY state, an agent must be licensed with a broker in order to receive compensation for the real estate transaction. Licensing requires more than just an agreement with the broker. (An individual agent can be their own broker but that requires fulfilling the requirements for a broker's license).

The reason? The broker is legally responsible for the salesperson and their actions. No broker is going to assume that liability on a transaction by transaction basis.

There is no such thing as an "independent agent". Being an "independent contractor" merely deals with the issue of whether or not taxes are withhold from commission checks.

So, find a broker, license with them and proceed.

Actually that's not true re: Independent Contractor. I've been and IE in one way or another for the better part of 2 decades in all kinds of industries, and believe me the IE/company relationship status goes far beyond taxes. IE's assume as much risk as the employing company does, hence the reason why you're starting to see the NAR recommend General Liability policies for Realtors in addition to E&O insurance. The risk for a broker on a transaction basis is no more or less than a full time basis - it's the same contract just a different timeframe.

50% for the marketing side is actually quite fair (IMHO). I've seen a HUGE disconnect between what owners "expect" from Agents to market their home and what those Agents are will to do -- even when the cost for marketing services are deferred until the property sells. The MLS is more & more of a Red Herring (along with Broker Reciprocity), as most of them license out the information in some capacity so that Joe Public can find home for sale listings relatively easy with a simple Google search. No password and no Realtor required. Newspaper and Real Estate rags are usually a HUGE waste of money for the Agent, so the Internet continues to be THE place where buyers go to search for homes. Even the NAR states that fact. However, the Internet is so much more than just Realtor.com.

Don't take my comments the wrong way - please - I'm simply stating what I see from the outside in. I'm sure it's a frequent occurance where any Realtor with an aging listing finds themselves doing a dance while answering the question "what have you done for me lately?" from the seller, right? 9 times out of 10 it comes down to the marketing. Again, all IMHO.

Ronny, the way you desribed it, I don't see a problem. You are a licensed agent, working for another agent as an assistant or what have you, and are eligible to receive referals or commissions, and since the other agent is a member of the MLS, there are no problems on that end. (the managing broker might not even have to get involved, but that depends on their office policy regarding assistants)
What the agent wants to pay you, is between you and him.

If you are a licensed real estate agent AND active under a broker, then your plan is acceptable if you can find a broker to do it.

If you are not licensed and active under a broker, it is illegal.

As for your plan, I don't believe any successful brokers will be acceptable to it unless you license is active with their firm and lke Pike says, have an agreement with a certain agent.

You'll have to hang your license with a broker until you get your own broker license. The broker you affiliate with is most probably going to take a cut of your deals, perhaps capping out at some point. Once you affiliate with a broker under an arrangement to your liking, then you could refer clients out to other brokers using a referral agreement at whatever percentages are worked out between everyone. There would be no need for you to jump from broker to broker. (And don't forget, if you did try to jump from broker to broker, listings often stay with the broker.)

Ronny, I think you're confusing professional sports with real estate. There is no "free agent" relationship that I am aware of in real estate licensing. LOLOL

If you are licensed, and you want to jump from broker to broker, for whatever reason, that is your prerogative. However, if you perform activities that require a real estate license, and do so without hanging your license with a broker, you will get into some serious trouble, and won't be licensed for very long.

As a licensed agent, what would you stand to gain by constantly jumping around from broker to broker? It sounds as though you are hoping to create a situation that would in fact violate the RE licensing laws.

Wow, this post is shockingly wrong.

Licensed agents do not work for other agents, they hang their license with and are supervised by a BROKER. Office policy is not the determining factor. State law determines what is acceptable for all matters related to real estate licensing and broker-agent relationships.

"Wow, this post is shockingly wrong.
Licensed agents do not work for other agents; they hang their license with and are supervised by a BROKER. Office policy is not the determining factor."

Ronny, to receive compensation, you obviously have to hang your license with an Employing Broker. However, as I stated before, a Licensee/agent can share commissions with a licensed assistant/Agent.
Office policy might require you to be a REALTOR instead of just an Agent and also spell out assistant’s/Agent compensation agreements.

Yes Ericka, any employing broker where Ronny hangs his license or any agent can pay him, and agents do have assistants they employ.
P.s. in my state every agent is a broker, and with 2 years experience (and a 24 hr class), anyone can be a managing broker.
I have been a broker since 1990, I don't know about Erickas qualifications.

Wait up...hold on. Where in his post did he say he was a licensed agent? I think he stated that he was not yet licensed. Legally I do not think the listing agent could split his commission with him. Now if he happened to do it under the table that would be another story. But then again you could get in serious trouble if anyone found out. Also it is not ethical

I hate to say it, but it really seems as if ronnie has a bad misconception of the real estate industry.

Ronnie, if I were you I would call your local Real Estate Commission. A lot of your misconceptions will go away once you proceed in getting your license. There are MANY laws governing Real Estate, and to be honest I can see several that would be broken in your plan.

I wish you the best o luck.

DelCidsRealty, this is what Ronny said:
"So here's my scenario... Let's say I am a newly licensed Real Estate Agent.."

In my state, even as a NON-LICENSED Assistant, the assistant can get paid from the commission of the agent, how else are assistants paid?

Pikes Peak ---

Your broker statute and mine (Idaho's) are very similar (except for the individual broker status issue). I believe that, in Colorado, a non-licensed assistant cannot be paid on the basis of commissions generated because that would be commission-splitting which is a big "No-No".

Instead, they must be compensated on an hourly basis or a piece work basis. Compensation cannot be related to commissions.

Not as cut and dry here.

This is what our RE Commission Position is regarding compensation agreements, …:
CP-10…
5. That an employing broker pays their licensed or unlicensed employees pursuant to an oral or written employment contract.
Therefore, the contractual relationship between employing and employed brokers, as well as the office policy manual, should adequately cover the compensation of employed brokers.

CP-20 Commission Position Statement On Personal Assistants, says:
……
Licensees should not share commissions with unlicensed assistants. Although this may not technically be a violation of the licensing act if the activity is not one which requires a license, the temptation to “cross over” into the area of negotiating and other prohibited practices is greatly increased where compensation is based on the success of the transaction.

If brokers develop adequate policies for the use of assistants and routine procedures for monitoring their activities, the assistant can serve as a valuable tool in the success of the transaction. As with any other activity involving the delegation of an act to another, the freedom and convenience afforded the broker in allowing the use of assistants carries with it certain responsibilities for that person’s actions.......

I think, good written office policies become very important in making sure that no laws are broken when hiring a non-licensee, contrary to Erickas opinion.

p.s. CP-2 addresses “Commission Position On Referral Fees And Advertising Services”, which is another subject.

You clearly misunderstood my "opinion" stated in my previous post. State and Federal Statutes always trump private office policies. The purpose of office policy is to ensure compliance with the laws. Nothing I have said in this thread is contrary to established law or public policy.

"You clearly misunderstood my "opinion" stated in my previous post. State and Federal Statutes always trump private office policies."

What makes you think there are state and federal laws clearly defining all areas of real estate?
Many practices are not defined by law and adjudicated only when elevated to the court level.
There are a number of positions/interpretations that State RE commissions are not sure of in interpreting either state or federal laws because of their ambiguity. i.e. RESPA and referral fees comes to mind, as does RE employee/owner compensation etc.
Until then, office policies are the guiding rules for RE agents, which are normally written by RE attorneys.

Wow, again, unbelievably WRONG.

Courts interpret and apply the laws. Regulatory agencies can issue opinions based on court decisions (existing case law). Office policies are written to facilitate or ensure COMPLIANCE WITH THE LAWS. Office policies are not "guiding rules" for anything, in and of themselves.

How long have you been a broker?

"How long have you been a broker?"

No wonder you are missing it, you don't read responses.

Ericka said:
"Wow, again, unbelievably WRONG.
Courts interpret and apply the laws. Regulatory agencies can issue opinions based on court decisions (existing case law). Office policies are written to facilitate or ensure COMPLIANCE WITH THE LAWS. Office policies are not "guiding rules" for anything, in and of themselves."

Wake up!!! there is no case law, they are winging it until there is a case.
If you can provide some for my state, I'd change my mind.

Anyone can write office policies.

So, you're saying that these RE attorneys that allegedly write office policies are making up their own rules and policies, because the laws are too ambiguous??

ROFL

"So,you're saying that these RE attorneys that allegedly write office policies are making up their own rules and policies, because the laws are too ambiguous??"

If they were not, who would need them?

Wow, this is fun watching the back & forth. ;-)

I've actually decided to go another route and NOT go for my license - yet. I can legally be paid for my marketing services up front OR upon the sale of a property, doesn't matter. Since I am NOT a licensed agent, what I cannot do (legally) is base my compensation for marketing services rendered to any type of real estate commission.

What I CAN do, however, is base my compensation on something like square footage of the property OR a pre-negotiated flat fee. So, for example, let's say I have a FSBO property (which I do) that's listed at $900k that hired me to create a full marketing campaign, website, etc. Assuming it sells by owner, upon agreement of sale the seller has agreed to compensate me a flat rate that was pre-negotiated.

Now, if it does NOT sell by owner, the seller agreed to use a Realtor referral that I provide to them. Now, I know it's illegal for the agent to provide a referral fee to non-licensed individuals (typically 20-25% of the agent's commission from what I've seen & heard), we all know that it happens ALL the time. But to avoid ANY illegalities, I will provide the same marketing services to the listing agent for that property at a pre-set flat fee or based on the square footage.

If the flat fee or square footage rate just happens to be around 20-25% of the agent's commission, then so be it. Must be a coincidence. Either way, I'm providing a service that is NOT based on a real estate commission percentage.

I know I'm going to get flamed for this post, but does this scenario make sense??

It does to me. Good luck with your marketing efforts.

Ronny Bass ---

This is HIGHLY illegal.

What your are attempting to do is to craft a scheme to get part of the commission by labeling your efforts something else.

Your state real estate regulator has the right to terminate the license of any agent who participates in this scheme and, in most states, they have the right to pursue you.

The idea that agents give out referral fees to non-licensed people regularly is utterly bogus. And, downright wrong.

Labeling your efforts a marketing effort is a subterfuge because the cost of those services on the open market is far less.

My friend, you are playing with fire. Talk to an attorney. He or she will talk you out of this scheme.

This is our State RE Commission (by me condensed) guidance, each state has their own, check yours:

Negotiating, listing, contracting requires a license, i.e. bringing 2 parties (buyer & seller) together.

Payment for providing a name to a licensed broker is not specifically addressed in the license law.

If the payment is simply for the referral of a name to a licensee, with no further activity on the part of the referrer, the Commission will not consider it to be a violation of the license law.

Payment of general promotion of real estate business is not prohibited……..provided the activity does not otherwise constitute offering, negotiating, listing.

…the Commission has determined that many so-called advertising services actually involved brokering activities. The method of payment is often an important factor in determining whether the activity requires a license.

RESPA/HUD is another chapter.

Since we are dealing with Pennsylvania in particular, I took a peek at the Pennsylvania State Real Estate Commission page.

There is a set of Frequently Asked Questions at http://www.dos.state.pa.us/bpoa/lib/bpoa/20/real_estate_comm/frequently_asked_questions.pdf

It contains the following:

May a real estate licensee pay a commission or other valuable consideration to the person who referred a buyer or a seller to the licensee as a “thank you?”

Section 301 of the RELRA, 63 P.S. §455.301, prohibits an unlicensed person from receiving a fee commission or other valuable consideration for introducing a buyer or seller for real property located in the Commonwealth. In addition, a licensee who pays a commission or other valuable consideration to anyone other than his licensed employees or another broker may be subject to disciplinary action under Section 604(a)(12.1) of the RELRA, 63 P.S. §455.604(a)(12.1)

The basic point is that what Mr. Bass is attempting is barred in his state.

"May a real estate licensee pay a commission or other valuable consideration to the person who referred a buyer or a seller to the licensee as a “thank you?”"

Except he is not paid for the referral, he's being paid for his marketing and/or he could be a paid employee paid by the licensee directly (paid employees do provide names of buyers and sellers to agents, which is legal).

(I personally don't believe what he's trying to do will work, I as an agent would require him to provide superior marketing, which I don't think he can provide up front, and I certainly would not pay anything up front)

Reread Mr. Bass' post. It is clearly not truly a marketing effort. It is cover for getting a referral commission. His intent is clear and unmistakable.

"other valuable consideration" pretty much covers it in my mind.

People with bend the rules with there "interpretation" all of the time.

The problem is you play with fire and you will get burned,it's just a matter of time,not if but when.

Gents,

What I'm trying to do is not a scheme. It is not wrong. And it is not illegal. It is payment for services rendered.

I'm an Internet marketer. I've been doing it successfully for a long time for many different industries. The PA Real Estate Commission (or any RE Commission for that matter) cannot legally prevent me or anyone like me from providing marketing services of any kind to owners or Realtors attempting to sell a property. Likewise, a Commission cannot tell me WHAT to charge for those services, or WHEN payment for those services is due.

So if I have a FSBO property that has agreed to pay me X upon the sale of their property for marketing services, then I can legally be paid X so long as X is not tied to a percentage of the sale.

Similarly, if I refer a homeowner to a Realtor for listing and provide marketing services to that homeowner/Realtor for that property, I can charge and legally be paid X for services rendered so long as the Realtor agrees to it and it's not tied to a percentage of the agent's commission.

What I'm saying is that IF the pre-set flat fee OR square footage rate for my services happens to be around 20-25% of the agent's 3%, then there's nothing illegal about it. So long as the fee is NOT based on a percentage of the sale or a percentage of the agent's commission.

Again, I AM providing a service. Whether an agent wants to pay what I'm charging for those services is irrelevant. If I have the lead, then I control the deal. When I approach a Realtor with a potential listing for them, they will only get that listing is contingent on employing my services for a price of X upon sale. If the Realtor does not agree to X, then I go to the next one that does.

It's not personal. It's business. I have a right to make money for services rendered just as you do. I'm not providing anything other than marketing services (ie: web site, photos, virtual tours, search engine placement, online ad placement, etc). I'm not providing advice or council on ANYTHING other than how to best market and sell a home using the Internet. Why? It's not my expertise. And I don't WANT to do anything other than the marketing side.

Last time I checked, Steve, there's nothing illegal, wrong, or "bending the rules" about getting paid for providing a service. It's obvious you don't like how I'm going about it, but that's okay.

That's a great marketing company if you ask me!

"Hey I have a listing for you, I'll market it for you. If it doesn't sell, you don't pay. If it does sell, my marketing fee is X"

Write up a marketing contract. That "X" can be a percentage or a flat fee.

The traditional way of marketing is costly and can leave you in a hole if your homes don't sell.

Ronny Bass, If I were you, I would really consider getting your Real Estate license. This way you CAN get a commission cut AND collect for marketing!

Ronny,

No one will disagree with the theoretical point that you have the right to earn a living. The problem is the method you are seeking to pursue.

Sure. You can provide marketing services. But, the market value of those services is not anywhere near what you are quoting.

An example may be helpful. Assume the home is $200,000. With a 3% listing commission, the listing agent would get $6,000. Under your plan, he or she would owe you about $1,500.

A listing web site can be had for under $75. Professional photos are available in most markets for under $100. A virtual tour, even with a professional provider is about $100. Your additional services of posting the listing online (by the way, most franchises do that automatically and for free) is worth a few dollars. SEO/placement really isn't relevant for a home. My point is that your fee is FAR above market.

One can label what you are attempting to do anything you want. At its core, it is still an attempt to commission share. In your state, as in most, that is illegal.

No regulatory authority would be fooled. Any agent participating in this scheme would put their license at risk. And, you would be vulnerable to enforcement action (in my state the maximum fine is $5,000 and repeated behavior could lead to criminal charges).

I do not think that is legal especially for TX. As a new agent you don’t have to be licensed only, but you want to activate your license you have to have a contract with a broker, not with experienced or inexperienced agent. There is not term as a "free agent"?! In TX agents are allowed to pay referral fee only to other agents with active license. The only legal fee an agent here is allowed to pay to a "free agent" is $50 in gift card. I am talking about TX, if you are licensed in some other state the law there could be different and you need to advise with a lawyer.

I do not think that is legal especially for TX. As a new agent you don’t have to be licensed only, but you want to activate your license you have to have a contract with a broker, not with experienced or inexperienced agent. There is not term as a "free agent"?! In TX agents are allowed to pay referral fee only to other agents with active license. The only legal fee an agent here is allowed to pay to a "free agent" is $50 in gift card. I am talking about TX, if you are licensed in some other state the law there could be different and you need to advise with a lawyer.

I agree with Steve. A state RE Commisssion or court of law will look at your intent. Your fees and actions could very well be construed as an intent to circumvent the licensing laws.

Steve, you're missing my point. If, for example, you hired me to perform marketing work for you for a listing you already had, then you are correct that you will pay for services rendered at whatever the market is dictating it to be.

HOWEVER, if MY marketing efforts succeeded in getting a FSBO, and that FSBO decided to list down the road, then my services are worth FAR more than "fair market value" when I refer it to a Realtor. I got the client, so I control the deal. It's that simple. I can charge whatever a Listing Agent agrees to pay to get the marketing package - and the listing - so long as the fee is NOT based on a percentage of the sale or commission. There is nothing illegal about that whatsoever. I do small 1-2 page websites all the time that are very similar to the sites I do for homesellers and I am compensated anywhere from $500-$3500. So it's not unreasonable at all to be compensated the same general range for services related to a website to market a home for sale.

I disagree wholeheartedly with you about the importance of SEO and other Internet marketing-related services for homesellers, but that's an entirely different discussion altogether. ;-)

Ronny,

You are dead wrong on this. I understand exactly what you are doing.

There is a whole body of law that deals with these so-called "bird dog fees". Packaging does not matter. It can be based on a percentage, a flat amount or even the receipt of goods rather than cash. I attended a couple months ago our mandatory state continuing education course. We spent considerable time on this very issue. I've heard this discussed in national-level courses.

In the area of mortgages, if a mortgage person were do the same with you, they would be in direct violation of the federal RESPA statute. There are both civil fines and potential criminal penalties.

The same applies to title work and appraisals. Again, one can not be compensated for connecting buyer or seller and the service provider.

Real estate agents are not directly regulated by the feds. We are still subject to the bar on receiving fees from service providers. But, the issue of paying to others is for state law (Congress deferred to state regulators).

This issue has been dealt with for decades. Real estate agents in most states are taught to avoid exactly this. There are literally hundreds of court decisions and regulatory findings dealing with this specific issue.

You REALLY need to talk to an attorney on this. Understand you are putting at risk the agents you deal with in this manner. If you have agents doing this now, shame on them. They will get caught eventually.

Ronny, you know you can not have a written referral agreement or contract mentioning anything about a buyer or seller referral in order to get paid by an agent. You can only have an unconditional agreement to provide the marketing (unconditional, not related to the referral). Any reference to you getting paid anything because of referring a buyer or seller to an agent can land you and the agent in hot water.
The basic idea of doing marketing for the agent is ok. Agents refer buyers to lenders, and lenders in return refer sellers to agents in appreciation, however, these acts are performed unconditionally and for the benefit of both without direct compensation.
You might consider establishing a relationship with agents for referrals, and they in turn will consider you, if you can provide a valuable service for them. You might find out you can make more money that way, than a one time shot for giving an agent a name and a tel. number that might be a bust.

Appreciate your feedback and candor, Steve & Pikes. If I may ask one more opinion...

National stats demonstrate that 2 out of every 3 FSBO's eventually list their home with a licensed Agent. The marketing work I've been doing for FSBO's is attracting many more. The fact is that I can put together the best marketing package in the world, but many (most) FSBO's don't know enough to get out of their own way to sell the property on their own and end up listing. And that's my angle. Already "been there, done that." I already have a relationship with the seller, and invariably when I get the question about referring an Agent to them to list, I'd like to get a piece of something that I've worked so hard to develop. 99% of the time they take my word on the referral because they TRUST me, and a listing (along with a kick-butt marketing package to go with it) is handed to an Agent on a silver platter. Literally. A bit frustrating to say the least.

I've been reluctant to get my license because I've found that most FSBO's have a very poor opinion of the Real Estate industry. Rightly or wrongly, it's actually played in my favor to point out that I'm NOT a licensed agent. I've had far too many FSBO's tell me that if they knew I was a licensed agent, the conversation would have ended. Please don't get offended, it is what it is and it's THEIR opinion, not mine.

I am very good at marketing homes for sale. I do NOT want to get into all of the other things that go with selling a home. We all know that in this day & age, one of the biggest factors for owners is what YOU (the agent) is going to do to market their home better than the next guy. So here's my question... Let's say I get my license BUT I do not develop a relationship with a broker. Let's also say I have a FSBO to refer, just like I do now. Can I be paid a percentage of the commission if I refer it to another agent and it becomes "their" listing (not mine) under their broker of record? Remember, under this scenario, I am licensed but not working under my own broker, but the listing is technically another agent's listing? I ask that question because I know agents get referral fees for out of state referrals, and they are paid for those from the out of state broker (or in some cases, the agent themselves).

Hope this makes sense...

Since commissions can only be paid by employing brokers to licensees, if you don't have an active license, you can't get paid. In my state it costs about $180 every 3 years for an active license (without belonging to the local board of REALTORS), why not just have an active license and get paid?
You can disclose that you have a license, but are not actively practicing.
The other concern I would have, might be disclosure to a FSBO, that you will receive a financial benefit when their property sells, because you are licensed. And the FSBO might feel like they have been duped by you if they find out, because you had a financial stake in it.

Pikes,

Is a license considered "inactive" if it's not attached to a broker? In other words, if I am a licensed agent, can I get paid on a referral if I do not have an IC agreement in place with a broker?

DISREGARD, I FOUND MY ANSWER:
Section 604(a)(12) of the RELRA, 63 P.S. §455.604(a)(12), prohibits a salesperson or associate broker from accepting a commission or any valuable consideration from anyone other than the licensed real estate broker with whom he/she is affiliated.

It' sounds like you want to create something similar to house values where you hold a liscense or have someone else hold a liscense in your company so you can collect refferal fees which set up the right way is legal.

Just for info the number 1 thing according to all surveys that sellers have trouble with and need a broker for is:NEGOTIATING THE CONTRACT


That is the number one response from sellers.

Now for commercial properties you wouldn't have to worry about refferals as the rules of respa do not apply.

Ronny if you are so good at marketing homes, just become a bloody agent and do it for a living instead of scheming and scamming. If you really are so good, you should make a fortune. It's so much easier and you don't have to share anything with anyone (except your broker). Or come up with hair-brained schemes to provide overpriced services that no one in their right mind should buy. Charging $500 to $3500 to design a house website is highway robbery. These things are now $50 a pop and I guarantee they are way better than yours. And they can be deployed overnight. This is no longer a novelty. Every schlub agent will be doing this within a year and it will be as mundane as a brochure. It already is, really.

And charging $24,000 to sell an average priced $400,000 home isn't?



If schlub agents like you spent half the time working on EFFECTIVE, VISIBLE marketing for their seller's homes (not themselves) as opposed to how much their commission is going to be, I'd agree with you. Until that happens, I doubt it.

And you WONDER why this profession gets such a bad rap. Maybe because people like YOU are in it, perhaps?? Hmmmm... Then again, I couldn't possibly know what the heck I'm talking about since I'm not an agent, right?

No it's not. The market proves it. If it wasn't worth it, nobody would pay it. Since most of the public is paying it, then by definition, it's worth it.

You however, claim you are charging $500 to $3,500 to design a house website that the MARKET now values at $50. I doubt anyone is paying you that, but if they are, enjoy it while it lasts, which will not be long. Anyone who pays you that fee to do a house website is an unbelievable sucker.

Why don't you post a link to one of your websites and we'll see how it measures up to the $50 ones?




"True colors, come shining through, true colors, and that's why I know you..."

I guess not becoming a Realtor because you hate them makes perfect sense.

Absolutely true ericka, it is legal as long is not referral fee. Agent can decide their self how much is going to spend to market the listing and who is going to do it. So if that works for you ericka and you can find agents agree to work with you go ahead and good luck. Personally I am not one of them and I have my reasons for that.:-)

I don't know about other states, but in Pennsylvania, you can't do it.

Can't do marketing for an agent and get paid??? Please explain.

Yeah, I'd like to hear that explanation too...

Ronny,

Wow, as an aspiring agent, this is very interesting. Just took my State and Nat'l exam and from what I learned in our State, what you are doing (taking a percentage of commission) but making it appear like a set amount of fees and taking control of the listing seem cloudy to say the least.

Affiliate agents can hire people to do marketing as long as it is not based on commission or a referral fee from a none licensed agent. However, I wouldn't want to hire someone who wants to take "control", which is a wordI you used in couple of the posts. The brokers ultimately is responsible for the affiliate agent so they should have some control on what the agent does, not the person the agent hires to do their marketing.

Being honest and ethical to the customer and broker is the agent's fiduciary duty. This means full disclosure on who is the real agent. Hopefully, Ronnie you are wrong in saying that all real estate agents have a bad rap. Maybe I will be in for a surprise but hopefully not. Also, why do you work with realtors if you hate them so much?

Sounds like you have talent and you could probably make a good living once you get your license. Your other option would be to just contract out and let the agents buy your marketing skills for a flat fee. If you have such a low opinion of real estate agents, why don't you market your website/skills to another industry?

This is just my humble opinion so please do not take it personally. Good luck!

I agree with you Calicio, I am on the same track with you, just I do not say too straight. Good luck to Ronny, everybody can choose the way they do business....

Yea...this is simple in South Carolina. You dont get paid anything. But yet people still dont understand this. The only person that can get paid from a real estate transaction is a broker. Your broker then pays agents, etc as company policy and state law allows. Everything else is verbiage,moot, etc.

Original post said "we agree to split the commission 50/50" Around here one's license would be in jeopardy. There is nothing to discuss.

Whats funny is watching the demeanor and purpose of Ronny change. Went from one thing to another, and wanted to start the old commision argument in one post. Its true you may have been the procuring cause in converting the FSBO but real estate law says too bad! Its as simple as that! You have no license so you have no say in procuring cause. PERIOD!

The simple answer to commision is, if you think its robbery or wrong, sell your house yourself, go generate your own leads.

If you came to an agent and said i will market your homes based on footage, size, color, smell, grass blade count, whatever, you can, and you can charge what you like. Tieing your charge into anything to do with the sale or referral is a no no because you have no license. Its that simple in SC according to every class I've taken.

Some people get licenses just to do referrals, espcecially people that are in marketing or come in contact with alot of people but don't want to be an agent.

I'm not following the logic of Ronny's marketing plan even if it were legal.
He wins the trust of FSBOs by implying that he is not a licensed agent but he knows how to market better than any agent.
He then helps the FSBO seller market their home using his amazing internet efforts.
When it doesn't sell he wants to refer the FSBO to an agent who will agree to pay him a fee for his continued marketing services (the fee which is a percentage or disguised percentage).

It seems to me his plan falls apart even before the agent is involved. It falls apart when the FSBO home doesn't sell due to his marketing efforts. His marketing failed. Even if it was legal to do so (doubtful), why would an agent want to pay 25% of their fee to continue Ronny's marketing efforts that already failed? Did I miss something? Please enlighten me.

You can be paid by the owner for staging, creating a website, making ads...what you cannot do, at least in NY, is be paid for selling a property unless you are an executor of an estate, an attorney, or an agent.

Ah, the old bait and switch!

A possible solution for you Ronny is getting your license. The only possible valid reason I can understand for not getting your license is you can't afford it or the fees. The classes don't take long to complete and the tests aren't too hard either. If you want to save on money try going to a broker that is not a Realtor (NAR member) and does not belong to an MLS. That's probably the cheapest solution for you where you can legally get paid on referrals.

In Pennsylvania it's called practising real estate without a license and there is a hefty fine.

Question (sorry to get off the subject, I asked a NY agent, but he either couldn't or wouldn't answer the question): Co-op in the MLS is offered to MLS/Realtor members only. Agents can only be paid by a broker. How can an attorney, who is not a Realtor or not working for a broker get paid a commission in NY without having a RE license.?

Attorneys automatically have a real estate license. At least in NY. Also, Coop is offered to MLS Realtors, but we also cobroke to non MLS with a separate form.

"Attorneys automatically have a real estate license. At least in NY. Also, Coop is offered to MLS Realtors, but we also cobroke to non MLS with a separate form."

Thanks for your response, however, a RE license does not automatically give you the right to get paid a commission. Only a broker can do that. So, are attorneys automatically given all the powers of a RE broker because they have a law degree, and/or will they have to apply and pay for a brokers license?
Without actually having a brokers license, what limitations do attorneys have in performing RE transactions and or running a RE business?
p.s. I was unable to find details on the NY Sec. of State website, or the regulatory license agency responsible, I even e-mailed them but got no response regarding attorneys legal limitations and responsibilities regarding RE transactions.
Any enlightenment and internet reference is appreciated.

In California, attorney state bar members are exempt from broker license education requirements. However, they must still pass the broker's exam to perform the full range of activities that require a broker's license. In general, attorneys can advise on real estate legal matters incident to their involvement in a real estate transaction, prepare and review documents, etc. They can also perform escrows in states where escrows are required to be handled by an attorney.

the above is not intended as legal advice

I will try to find out the next time I am speaking to an attorney!

Thanks!!!

Effective Oct. 1 attorneys and others with qualifying degrees will need two years of actual real estate experience before they can take the broker's exam.

Here is my attorney friend's answer (he specializes in real estate)

In new york an attorney can obtain a broker's license without taking the test or having any sales experience. You still have to pay the fee and apply for the license, you do not automatically get it solely by virtue of being and attorney you still have to apply and pay the fee. You of course can thereafter charge a commission when you sell a house or of course you can co-broke. I for example do have my broker's license. This is not necessarily the same in all states. That would vary by state and you would have to research that on a case by case basis.

So, when you talk about co-broke, you are referring to the MLS, since non REALTORS don't "co-broke" where I am, and do not have to abide by the COE, especially Art. 17 when it comes to arbitration about commissions.
Thanks for your response, it helped educate me.
p.s. our state (CO) is a one license state, brokers only.

On Long Island not all agents are Realtors and not all agencies are on MLS. The Hamptons (South Fork of LI) have a lot of agencies not on MLS and as far as I know Manhattan has no MLS and Brooklyn either has no MLS or a small MLS. The North Fork of Long Island had no MLS till a few years ago. When a non MLS agent wants to show one of our listings they ask for a co-broke and when we want to show one of their listings we get one from them.

I found this legal position in Texas:

http://www.trec.state.tx.us/pdf/articles/other/tar_001.pdf

I know that I'm a little late to the party, but this was a very interesting discussion. Thanks to all who posted and contributed. I have a question though... =^)

What if the market value for the web-services were in fact 25% of the commission, would we still have a problem here? His intent ,IMHO, is clear and would throw up red flags all over the place. But if market value for his services were in fact 25% of the average commission, would we have a problem here???? How would intent be proven in this case? Just curious....

Great thread... Awesome discussion... I thought that I knew my craft... boy what an education I'm getting on this website... =^)

TrueVisionary...

Define average.
Because the web service provided is not result driven, i.e. how can you say the house sold for more money because of the website? RE is result driven, no sale, no pay; is the web service provider willing to work like an agent, no sale no pay?
Do you think virtual tour providers, inspectors, appraisers etc. would work that way? I don't think so. (besides it being illegal)

Hmmmm... I see... but how about this... Lets just say for the services he provides, ie... virtual tours, SEO, etc... that he decides to charge a fee for these services. A flat fee, regardless of the homes value. And lets further say that that fee is equivalent to 25% of the average sales commission.

Example:

Let's say that he is operating in a market where the average sale price is $300k. The total commission is 6%, 3% on the Listing side and 3% on the selling side. 25% of a 3% commission on this particular sale would be $2,250.00. Now lets say that this is his fee. Let's also say that other web companies are charging the same thing in this market... In other words, this is the "going" rate.

Would he still have a problem? Would there be any question of intent? If so, how could that be proven?

Your point on RE being "result driven" is crystal clear. Real Estate Brokers/Agents are definitely different from other professions in this regard.

Could he have a fee structure like so?:
$3,000 - Ultra Mega Kick butt w/all the bells and whistles site.

$2,000 - Kick butt w/some of the bells and whistles site.

$1,000 - Basic site

TrueVisionary...

Sorry, I just don't know any agent dumb enough to go for anything like this. (not saying there aren't any out there...)

I agree that this is not reality, but this discussion was just sooooo interesting. =^)

TrueVisionary...

The reason this is so silly is that individual listing web sites (ie. the web address looks like: http://www.123SMain.com) run about $75 with 25 pictures, a virtual tour link, extensive community information, etc.

Anyone charging the amounts noted above would clearly be charging for something besides the web site --- and that is clearly improper.

In fact, you are not newly licensed. You dont get your license until you have signed with a broker. Just because you fulfilled the requirements and passed the little test, does not mean you are licensed.

And if you are not licensed, and working under a broker, it is illegal to receive a commission here in PA.

So, why dont you concentrate on choosing your company instead of trying to figure out ways around whatever it is you are trying to do.

Yes, service providers usually get paid a flat rate, not a percentage of commission since that is illegal.

Why are you trying to catch a falling knife?

You're kidding me, right?

A percentage of the agent's commission goes to the broker, another portion goes to the IRS, but you think agents would be willing to shell out a huge chuck of what is left after everyone took their piece of the pie?

I think you need to look into a different career, or at least look to provide service to another sector of the market.

Falling knives are dangerous.... =^)

Replace the agent with a Broker/Owner or an agent with 100% Co.
Hmmmmm... Quite interesting... Quite interesting indeed...

TrueVisionary...

I totally agree with you. The reality is that the market has brought the price of such services way down over time. You can actually do it yourself and save the $75. So I am in total agreement. What is intriguing about this whole discussion is our system of capitalism. In this great country that we live in, anyone can do, say, create, and sell just about anything. I know that my point is extremely hypothetical, but I just wanted to bounce this around a bit. For instance:

In the "world" that I created... (LOL) =^), the details are:

1. Average SP of homes is $300k
2. Rate for the very best web services is 3k

Now we all know that value is perceived differently for different people. This is seen on ebay on a daily basis. People pay serious money for things that others would think is absolutely ridiculous. But hey... This is America!!! =^)

My point is that some Brokers/Agents would in fact pay this fee if they perceived that it had some value to them. There also would be no problem with R.E. Licensing laws because people can charge what they please here in America for just about whatever they please. The free market will determine real quickly what something is worth.

Now back to reality... =^)
The reality is that his services are not worth $3k IMHO, and the way he's going about it, is clearly in violation of most, if not all state licensing laws.

TrueVisionary...

There you go! Reality at work.

I can't see an agent paying $500 per listing for something like that, let alone 25% of their commission! That's just NUTS. Most agents I know cringe at spending $75 per listing for virtual tours - heck, why should you when you have other programs to do it yourself, just as well, for very little money?

Sorry, bzzzt. move along...lol

I dont really see how the whole discussion was interesting.
Seems like more unresearched, pipe dream ideas to me.